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Making the JOBS Act work

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Advocates for the JOBS Act are on the Hill this week, hoping to add to its already impressive list of sponsors from both sides of the aisle. The bill would amend the Higher Education Act to support job training programs for adults who lack the skills or credentials they need to get a foothold in today’s labor market. It’s heartening to see bipartisan support for job training, which is woefully underfunded in the United States even as the skill requirements of jobs creep up and employers struggle to fill positions.

The JOBS Act is proving popular among lawmakers. It aims to help Americans without college degrees move into good jobs, and to do so without adding any new spending. But that’s also where this well-intentioned bill gets into trouble, because the funding source it seeks to leverage — the Pell grant program — was never designed to support short-term job training and lacks the critical quality controls and consumer protections necessary to ensure that these programs actually lead to good jobs.

Of greatest concern are the potential equity impacts of the bill, which opens up access to billions of higher education dollars and redirects them to pay for training for jobs that do not require a college education and are often low-quality and/or low-wage positions that are filled disproportionately by people of color and women, and particularly women of color.

Fortunately, there are a few common-sense additions that can ensure the JOBS Act lives up to its aspirations while also protecting students and taxpayers from a potential flood of low-quality training programs leading to dead-end jobs.

Funding Short-Term Training with Pell Grants

The JOBS Act changes the Pell program so it can be used to pay for very-short-term job training. Pell is the country’s largest federal grant program that helps Americans pay for college. The bill’s sponsors argue that the Pell program does too little to help students who do not want to pursue a traditional four-year degree. It’s an odd framing, since Pell grants can already be used to pay for a wide variety of programs other than a bachelor’s degree, including associate degrees and certificate programs as short as 15 weeks. Nevertheless, JOBS would push those boundaries even further, lowering the required program length from 15 to eight weeks and eliminating the requirement that programs be credit-bearing.

The most important thing to know about the JOBS Act is that the bill does not hold institutions accountable for the labor market outcomes of students in these short-term programs. And for a bill whose stated purpose is to help Americans get into good jobs, it’s a dangerous omission. It’s also what makes the bill such a gamble for students and taxpayers.

The Long Odds Facing Job Seekers with No College

The JOBS Act makes two big bets about the job training programs it seeks to fund. The first is that there are many good jobs to be had with just eight weeks of training or through noncredit education programs. On this point, the evidence is thin. While a multitude of rigorous studies have shown strong and long-lasting returns to bachelor’s degrees and many career-focused associate degrees and certificate programs, there are no comparable studies pointing to similar returns for short-term or noncredit education programs.

Some studies have tried to capture the returns on “nondegree credentials” (certificates, certifications, and licenses) and their findings are mixed, with most indicating positive impacts on employment but more variable impacts on earnings. A consistent finding is that nondegree credentials generate the most value for individuals who have a bachelor’s degree. Multiple studies also find that the nondegree credentials women earn are, on average, worth less than those earned by men and some studies point to troubling inequalities in the value of nondegree credential programs by race.

In fact, according to one nationally representative survey, more than half of women with no college degree who earned a certificate, certification, or license are unemployed and/or still make less than $30,000 a year. Their credentials are for jobs like home health aide, medication assistant, food service worker, and office assistants, all occupations that require just a few weeks of training and which would meet the new Pell eligibility requirements proposed in the JOBS Act.

It is also true that many studies do find some short-term credentials lead to well-paying jobs for individuals with only a high school diploma, and these would also be eligible for funding under JOBS. But the best results are in a very limited set of occupations. Commercial driver’s licenses and entry-level welding certifications are the most commonly cited examples. But even these credentials come with a more complicated backstory about poor job quality and high turnover in those fields.

The second big bet is that by enrolling students in noncredit programs, colleges can entice them into degree programs where the payoffs are higher and more consistent. Here again, the research is not encouraging. Studies of “stackable credentials,” a strategy that organizes an associate degree program into a sequence of discrete but connected credentials that can be completed independently, indicate that few students continue beyond the first step in the stack. An important exception are “I-BEST” programs, which successfully connect adult basic education students to credit-bearing coursework at a community college – but these programs are not short-term and they are already Pell-eligible.

A Safe Bet for Colleges and Employers

We do know a lot about what happens when Congress broadens the eligibility requirements for the Pell grant. Because the program is large and well-financed—the government awarded nearly $28 billion in Pell grants in 2018—colleges pay close attention to the rules and adapt their program offerings to take advantage of any new access to funding. For example, after Congress expanded eligibility for the Pell grant and student loan programs to fully online degrees, the number of programs increased dramatically. Today, they enroll 15 percent of undergraduates, mostly adults. What did not increase were graduation rates. In fact, according to one recent study by EduVentures, fully online programs widen access to college but lower the odds of completion. The colleges and universities get paid either way.

There is every reason to expect that if the JOBS Act becomes law, institutions will respond by creating many new eight-week and noncredit training programs. Some of these might lead to good outcomes for students. Many will not. And since Pell grants flow to programs based on their eligibility for funding, not student outcomes, successful programs for colleges will be those that enroll many students.

History also teaches us that students will enroll in these new programs, potentially in large numbers and with the hope of completing a college program that will lead to a good job in “weeks not years.” We also know that the students most likely to enroll will be among our most vulnerable citizens: first-generation students, many older, low-income, already working, and disproportionately from communities of color.

The JOBS Act does include a series of “guardrails” designed to protect students from throwing their time and money away on bad programs. The problem is that none actually ties the funding to student outcomes, which is the only way to ensure the programs deliver on their promises. Despite a lot of mentions of WIOA metrics, career pathways definitions, state and federal approval processes, and promises of data-sharing, ultimately the JOBS Act pays colleges to enroll students in job training programs and does not hold them accountable for whether a student gets a job, or a good job. That’s bad workforce development and a poor use of higher education funding. 

Three Fixes to Make the JOBS Act Pay Off for Students

The good news is, there is still time to improve the bill. Here are three common-sense changes the bill’s sponsors can make to advance the goals of the JOBS Act responsibly while also protecting students and taxpayers:

  1. Build an Evidence Base with Pilot Sites: The JOBS Act could fund pilots with rigorous evaluations to determine which types of programs lead to good jobs and which students benefit from access to very short-term and/or non-credit programs.
  2. Limit Eligibility to High-Demand and High-Wage Jobs: The JOBS Act requires colleges ensure the training programs lead to “high-demand or high-wage” jobs. In this time of historically low unemployment, almost all jobs are “high demand,” including those that pay poverty wages. The Bureau of Labor Statistics has published helpful guidelines on defining “high wage” relative to educational levels, including for individuals with “some college,” which would best describe graduates of JOBS Act programs. (See Identifying High-Wage In-Demand Jobs—Employment & Training.)
  3. Tie Funding to Outcomes: The JOBS Act could require the Department of Education to monitor the labor market outcomes (employment and earnings) of participants in eligible job training programs and remove funding for persistently poor-performing programs.   

The JOBS Act is an important bill that shines a light on our chronic underinvestment in workforce development. But we owe it to the millions of Americans in search of good jobs and economic security to make sure that the training programs really do connect to good, middle class jobs. With these three changes, the JOBS Act can be an important step in that direction.

Mary Alice McCarthy and Livia Lam are the directors of the workforce development teams at New America and the Center for American Progress, respectively.


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